International Business Environment - Analysis and Implications

This report analyses the business techniques used to analyse the international business environment, impact of globalisation and international trade on national economies, organisational structure of business in global market, risks involved in operating the business in international environment, micro and macro environment of the company, benefits, opportunities and challenges of globalisation and international trade.

International Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK 1............................................................................................................................................4
Evaluate the business techniques utilised to analyse the international business environment.4
Impact of globalisation and international trade on national economies.................................5
Organisational structure of business in global market...........................................................6
Evaluate the risks involved in operating the business in international environment.............7
TASK 2............................................................................................................................................7
Micro and Macro environment of the company.....................................................................7
Benefits, opportunities and challenges of globalisation and international trade....................9
An assessment of the extent to which working in international environment affects the success
of the business......................................................................................................................13
TASK 3..........................................................................................................................................14
Analyse the implications of organisations of the cultural and regulatory diversity in global
markets.................................................................................................................................14
Importance of corporate social responsibility and sustainability.........................................14
Compare and contrast management approaches to sustainability........................................15
CONCLUSION .............................................................................................................................16
REFERNCES:................................................................................................................................17
Books and Journals:..............................................................................................................17

INTRODUCTION
The International Business Environment is pivotal for the economies of a country. It is
multidimensional as it contains many things such as political risks, legal and taxation issues,
exchange risks as well as cultural differences. IBE plays an important role in the growth and
development of a nation. Hence, International Business Environment denotes an environment in
which international organisations allocate their businesses. It is mandatory for the individuals at
the managerial level to deal with factors that include international business environment. The
company which is chosen to prepare this report is Jaguar Land Rover Automotive Company. It is
British multinational automotive organisation which manufactures luxury cars and sport utility
vehicles (Ahmad, Masri and Lee, 2019). It has headquarter in Whitley, Coventry, UK. The main
activity of this company is the design, development, production and sales or automotive products
bearing the Jaguar and land Rover marques. It has been a subsidiary of Tata Motors since it was
introduced as a holding company. Also, it is reputed as the world class car manufacturer of the
customized car bodies by exploiting high quality devices and machines. The following report
consist business techniques that is used to analyse the IBE, it will also include the impact of
globalisation and international trade on economies of country. Later, it will analyse the macro
and micro environment of business, while assessing the opportunities, benefits and challenges of
globalization and international trade. Furthermore, it will analyse the implications for business of
regulatory and cultural diversity in the global markets. Lastly, it will assess the importance of
CSR and sustainability.
TASK 1
Evaluate the business techniques utilised to analyse the international business environment.
International business environment can be understood as the trade of products, services,
capital, technology, knowledge across national boundaries and at international scale. Whereas,
international business environment is that surrounding in which larger or bigger firms expand
their business at international level (Farhoomand and et.al., 2021). IBM involves several
opportunities and threats for the growth and development of the company. In order to detect
them there are several business techniques that are used to analyse the international business
environment such as STEP analysis, SWOT analysis, PEST analysis, SNW analysis and many
more. In context of Jaguar Land Rover Plc, the discussion is below:

 PEST analysis: It refers to the analysis of the political, economical, social and
technological factors in the external business environment which can impact several
business operations and their performances. It provides a framework of macro
environment of the business utilized in the environmental scanning component of global
business management. It is a strategic tool for the company as it helps to understand the
market growth or fall , directions for operations and so on. SWOT analysis: This technique is used to analyse the internal and external factors of the
business which contains strengths, weaknesses, opportunities and threats that are present
in the business environment (Gu, Cao and Wang, 2019). Hence, it is framework that is
used by the managers to synthesize visions obtained from the internal analysis of the
strong and week points of the business and those from an analysis of the external
opportunities and threats.
 Grid analysis: Grid analysis is used to make any decision which needs selection between
a range of concrete substitutes. It is broadly exploited in areas of capital allocation,
design engineering, product management, procurement and many more. One of the
advantages of Grid analysis is that it makes the process more purposeful.
Impact of globalisation and international trade on national economies.
Globalization denotes a process which is dependent on the international strategies, intent
to expand business activities on an international or global level. The main objective of
globalization is to offer a superior competitive edge to the companies, while lowering operating
costs and to gain a large number of goods and services and consumers for it. Moreover, the
globalisation aims to increase the economies throughout the world by developing markets more
efficient. The hope is that raised international trade will increase more competition which will
extended wealth in a equal manner (Haak-Saheem and Festing, 2020). In case of Jaguar Land
Rover Plc Company, the globalization can deliver both positive and negative impact on the
business, which are as follows:
Benefits of Globalisation: Technological innovation: When the competition is increased in the international
business environment, it inspires new technological development as well. The increase
in FDI assists enhance economic output by making processes more efficient.

 Foreign Direct Investment: FDI tends to increase at a much greater rate than world
trade does. It helps to increase the technologies transfer, growth of international
organisations and industrial restructuring.
Risks of globalisation: Interdependence: Globalisation increases the interdependence between countries and can
result in global or local instability. This could happen if the domestic economic
fluctuations end up affecting a great amount of nations relying on them.
 National Sovereignty: Some see the increase of global companies, nation-states and other
global companies as a threat to sovereignty (Hampden-Turner, Trompenaars and
Hampden-Turner, 2020). In the end, this could result some leaders to become patriot.
International trade is meant by the exchange of products and services among various
nations. It opens new markets for the companies and exposes nations to products and services
unavailable in the local country.
Benefits of international trade:
International trade helps to grow nation's economy as exports in the international trade
helps to create jobs and increase growth in the economy and offer local organisation more
experience in producing for global markets. Also, organisation such as Jaguar Land Rover Plc
gain a competition benefits in international trade.
Drawbacks of international trade:
The only method to increase exports is to make trade easier, Governments do this by
decreasing tariffs and other blocks to import. That result in reduction of jobs in local markets that
cannot complete on an international scale. Nations with traditional economies could lose their
domestic farming base as developed nations subsidize their agribusiness.
Organisational structure of business in global market.
It is identified that Jaguar Land Rover Organisation uses vertical functional structure for
their business in the international context. This is a structure that gives workers with a direction
for growth within the company. Workers capitalize on their skills and abilities as a means to step
up on a ladder in the certain department of the business. Somehow, companies that implement
this sort structure in the company may distracted from the financial goals.

Evaluate the risks involved in operating the business in international environment.
It is evaluated that globalisation and international trade carries a lots of risks and
challenges that affects the business while operating the business in international environment.
Globalisation creates interdependence among countries where operations of business in one
country could affect the business of other country. Having such fluctuations in the global market
affects the operations of business and ultimately affect the business objectives. International
trade involves the risk of import and export as borders of nations includes tariff barriers,
government interference and many more.
TASK 2
Micro and Macro environment of the company.
PESTLE analysis is broadly used in the strategic planning of the company. It involves
several macro environmental factor such as political, economic, social, technological, legal and
environmental factors. The Jaguar Land Rover Company operates their business in a dynamic
and complex environment characterised by growing environmental activism, regulatory changes,
technological changes and so on (Jafari-Sadeghi, 2021). The following is the evaluation of macro
environmental factors in the context of Jaguar Land Rover: Political factors: Political stability is a pivotal factor that affects the business of Jaguar
Land Rover. If the company is planning to expand their car manufacturing factory in
other country, it is necessary for it to consider the political stability of that country. The
rise and fall in the car sale, tax level by the government will influence the decision-
making of the company. The introduction of the environmental tax or fuel consumption
tax for making products or cars that are more fuel efficient can affect the company
production level and its sales. Economic factors: The alterations in the government spending can also alter the methods
of payment by Jaguar for manufacture or development. The reduced government
spending in the automotive sector or any less lending or borrowing can impact the
development of Jaguar. The increased development of infrastructure can offer more
transport links resulting in the great production levels and simple distribution of goods.
Moreover, when the inflation rate increases, the brand has to rise the prices for generating
more profits for the business.

 Social trends: These factors are ever changing and can affect the business. Jaguar Land
Rover have to be aware about the changing trends of the society, religious beliefs and
values of the people living in specific region. For instance, Christian employees are not
needed to work on Sunday while Muslim employees have relaxation time to pray during
the day at the company. Technological factors: The chosen company is known for the exploitation of cutting-
edge innovation in its vehicle design and manufacturing. Its knowledge in the aluminium
technology has moved the world by facilitating the light weight and more fuel efficient
cars. Such products have been presented with e-performance models having an intelligent
system to use the efficiency. Furthermore, the brand is also focusing on the elimination of
driving errors and encouraging safe road travellings. Environmental factors: Jaguar Land Rover provides an extreme value to resolving the
environmental issues as automotive company. It already implemented a range of
legislations to make sure that their process of car manufacture reduce wastage and
emission. Also, the brand is working hard to make fuel efficient cars and using recycled
materials (Khan and Baldini, 2019). It also initiates investment in projects such as
encouraging renewable energy resources. Legal factors: The organisation is required to abide all the laws related to trade and
employees rights so that they can function smoothly. Jaguar Land Rover has to get
registered for its copyrights and patents to avoid the sale of duplicate products with akin
names.
SWOT analysis:
This analysis helps the company to analyse its internal (strengths and weaknesses) and
external factors (opportunities and threats). In case of Jaguar Land Rover, this analysis enables
the brand to benchmark its business and performances in the market. The following is the
discussion of SWOT: Workforce: The company have a skilled and expert employees who works hard for the
company to deliver high quality and more efficient cars to the customers. Brand value: It has a high brand recall because of its creative promotions and
positioning. It ranks 55th in the ranking in the year of 2016. Also, it placed top in the
automotive brands in UK.

 Popularity: The brand is very famous among luxurious brand of cars. They already have
managed to stay away from scandals and have developed a great brand image for itself.
Weaknesses: Popularity: Undoubtedly, the brand is very popular in the markets of UK and are
preferred choice among customers but it is not same in other big markets such as Japan or
Germany. Although, the popularity Chinese and Indian markets are great but still needs
to be done a lot. Problems in the past: Although , the company is known for its high quality car but in
past, there have been some issues with English auto manufacture. It is found that the
company facing the issue of seat belt of the rear seats and cars.
Opportunities: Environmentally friendly: The brand is required to minimize the emission of CO2 and
other components to show goodwill. The future will pay attention on this and
governments will also introduce new emission policies. Hence, the brand requires to get
on with this to be ready for such alterations. Acquisitions: The company can also focus on the new acquisitions to target the new
customer base (Lartey and et.al., 2021). They require to trade down for rising the
customer base and making greater profits and sales.
Threats: Changing government and environmental policies: The entire world is paying attention
on the more fuel efficient vehicles and the government is thinking to alter environmental
policies for the same. It can be a threat for the future of the company if they do not align
with such concept. Competition: It has strong competition from Bently, Audi, Mercedes, Porsche and many
more. All of such organisation are the great players in the automotive sector.
Benefits, opportunities and challenges of globalisation and international trade.
Basis Globalisation International trade
Benefits  Globalisation makes it
easier than ever to
 It will benefit the
company from

approach foreign
culture such as food,
art, movies and many
more. This free flow of
goods, people or
information is one of
the benefit of the
Globalisation.
 Global competition
leads to both quality
and affordability in the
markets. As customers
understand that they
have a range of options
from the section of the
world, they will opt to
shop the best, requiring
organisation to
improve the quality if
they hope to remain
competitive.
 One of the most top
benefit of the
globalisation is the
rapid spread of
technology throughout
the world.
 The EU centre for
International Political
Economy defines that
globalization has
currency fluctuations.
For example, when the
UK currency is down,
the company may be
able to export more as
customers in other
countries will get
advantage from the
favourable currency
rate of exchange.
 It helps to boost the
reputation and brand
name of the company.
Success in one
economy can promote
success in other nations
as well (López-Chávez,
Maldonado-Alcudia
and Núñez, 2020).
 Global markets can
open up routes for a
new line of products
and services. It can also
facilitate the benefit to
specialise in other area
to serve that economy.
 It benefits with market
diversification. By
becoming less
dependent on single
nation may support the

assisted minimize high
inflation rates in the
western economies, so
each dollar of customer
spending goes further.
Moreover, competition
on the international
market means the
prices of several
products have declined,
so that acquisitions that
were not affordable
such as luxury cars are
not affordable for lots
of people.
company to reduce the
potential risks in the
core market (Lund-
Thomsen, Hansen and
Lindgreen, 2019).
Opportunities  Globalisation leads to
enhanced competition
for both domestic and
international
organisation (Lundan,
and Li, 2019). It
provides more choices
to consumers will rise
in the satisfaction level
and simultaneously
result in the higher
customer loyalty and
repetitive shops.
 It may also help to
increase in the amount
of customers, which
 It will help to boost the
number of potential
customers by going
international. Each
country where the
company wants to
expand, open up the
path to grow and
develop by increased
revenues.
 It will also help to
decrease competition.
As the company may
find opportunities to
have less competition

will result in the rise in
the revenue of the
business.
 As the globalisation
involves increased
level competition,
company will have to
initiate operating more
efficiently. Decline in
the wastage involves
reduces operating
costs, leading to higher
profits.
 Increased spending
cross-borders investing
in the local country
will increase in the
economic growth.
in other economies.
Challenges  Globalisation involves
challenges for
international
companies in terms of
leadership or capital
investment.
Establishing an
organisation in a new
economy, particularly a
developing economy
needs substantial
upfront capital.
 It also could be
 A certain challenge
facing international
entrepreneurs is the FX
(foreign exchange
rate). The exchange
rate between any two
currencies can move
favourable and non-
favourable for trading
company in the interval
between payment
ordering. Also,
companies situated

difficult to identify and
retain managers who
have sufficient skills
and expertise that adds
value to the brand and
work effectively within
the local work culture.
 It also involves
challenge with several
laws in various
countries. Challenge in
that system lead to
impediments in run the
business in new
nations.
 It can also contribute in
the decline of job
opportunities as
organisation move their
manufacturing system
overseas.
abroad and operating in
terms of the domestic
acceptance, can impose
a serious issue (Marić,
2020).
 In an international
trading, there could be
a language barrier. It is
quite vital for the
company to ascertain
spoken language in the
nations where they
allocate the business.
 Managing employees
could be an another
challenge who live
over the globe. When
trying to work as a
team, it can be hard for
the company to
consider language
barriers, time zones,
cultural differences,
technological level.
An assessment of the extent to which working in international environment affects the success of
the business.
It is assessed that organisations which are operating their business at international level
creates a several opportunities and threats for their business. Working and dealing at global level
is not easy at all, it requires knowledge about the market where company want to expand the
business, gaining a new customer base is a big challenge in the international context. It important

for the business to find the strengths and weaknesses of the business that helps to achieve better
success in the new marketplace.
TASK 3
Analyse the implications of organisations of the cultural and regulatory diversity in global
markets.
Cultural diversity represents the different cultural background and ethical groups in
community. In organisational setting, it can involve employees from diverse background,
different sexual orientations, different races, or different political views (Oliveira, and et.al.,
2019). In context of Jaguar Land Rover Company, it is important to find and understand how
culture impacts the global business in three main areas such as communication, organisational
hierarchy and etiquette which helps business to avoid misunderstandings with clients and
employees from abroad. Communication: Effective communication is very important for the business to get
succeed, particularly when there is a real challenge of message getting “lost in
translation”. Serving the right information accurately and promptly is complicated to
effective work and performance of team. Organisational hierarchy: Organisational hierarchy and attitude towards roles of
management can also differ between cultures. Whether or not those in middle or lower
level of management positions, questioning senior decisions, speaking up in meetings
or expressing a different opinion can be determined by norms of culture (Sinay, 2019).
Also, it may involve societal values and social equality.
 Etiquette: Various approaches to communicate professionally are one of the
innumerable workplace differences norms throughout the world. The concept of
punctuality also vary from cultures in the international business environment.
Importance of corporate social responsibility and sustainability.
Corporate Social Responsibility allows businesses to do their best for the society,
customers, environment and for that matters stakeholders of the company. The term CSR
provides an opportunity to all the workers of the company to contribute towards the society,
country and many more. In case of Jaguar land Rover Company, the following is the significance
of CSR:

 Brand Value: A sneak peek into the world' top brand would suggest that responsibility is
at the prime of their business. A well managed CSR system would help the business to
get more brand equity, resonate and awareness with strong values. In case of Jaguar
Land Rover, the fulfil their responsibility by producing cars which are more fuel
efficient and focus on the emission of CO2.
 Employee retention and engagement: There was a time where employees did their job
only for the purpose of getting bread and butter, but in present time, employees are
looking for such companies or jobs which offer a good value to them and position.
Individuals are working for organisation that have great public image (Ma and Bu,
2021). CSR initiatives involves volunteering programmes which developed values such
as loyalty and empathy. It leads to better collaboration and team work in the company.
The chosen firm takes part in various CSR programs and promotes sustainability in the
organisation.
Sustainability denotes a concept linked to the creation of goods and services that contains
meeting the current needs without compromising the ability of future generations to satisfy the
own requirements. It is very fundamental to exploit the environment and its resources smartly
and secure for the goodness of the planet, humanity, environment and all living beings. In case of
Jaguar Land Rover, the importance of sustainability is as follows: Reduced energy usage: Company which practices sustainability leads to valuable
reduction in the long term energy. Some initiatives are energy efficient vehicles, use of
solar and wind energy and many more (Szymanski and et.al., 2021). Societal impact: Promoting the natural resources deeply penetrates not only the standards
of the company but also workers and families of them. The societal impact can reach
wide and far.
 Ensures a future for all: It also important to think about future generation and planet.
The present actions and choice of conduct work have long term affects on the future
generation. It helps businesses to make ethical choices that bring a liveable and safe
future to the next generation.
Compare and contrast management approaches to sustainability.
It is found that having sustainable approach in the management of business is very
important for the business. Organisation which focuses on the ethical way of conduct, follows all

the rules and regulations of environmental laws, creates and develops a sustainability in the
management of business tends to build a great brand image in the market. In case of Jaguar Land
Rover Company, the brand highly focuses on the sustainable approach of management by
focusing on the creation of more fuel efficient vehicles. It highly focuses on the high quality
approach but do not tend to ignore the safety of environment.
CONCLUSION
It has been concluded from the above report is that international business environment is
all about company is planning to their run their business at the international level. In order to
analyse the international business environment, there are several techniques that can be used by
firms such as SWOT, grid or PESTLE analysis. The implications of globalisation and
international trade is important to understand by the organisation as it can affect their activities
and operations of business. It also involves opportunities, benefits and challenges that must be
considered by the firm so that they can know the chances of growth and development in
international markets. Furthermore, it involves cultural and regulatory diversities which cannot
be avoided by the firm. Ethical practices and CSR initiatives can improve the brand image and
brand loyalty.

REFERNCES:
Books and Journals:
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Relation to the Changing Business Environment. Global Business & Management
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Farhoomand, A. and et.al., 2021. Managing (e) business transformation: a global perspective.
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study between economically advanced and developing country. International Journal of
Entrepreneurship and Small Business, 43(3
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Lundan, S.M. and Li, J., 2019. Adjusting to and learning from institutional diversity: Toward a
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Ma, Z. and Bu, M., 2021. A new research horizon for mass entrepreneurship policy and Chinese
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